Days Sales Outstanding (DSO) is a measure of how quickly a company is collecting payments from its customers. It shows the average number of days it takes for a company to collect cash after a sale has been made. The formula for calculating DSO is: DSO = [Average Accounts Receivable/(Total Credit Sales/Number of Days in the Period)] X Number of Days in the Period. In other words, calculate the total amount of credit sales over a certain period and divide it by the number of days in that same period, then take this result and divide it into the average accounts receivable balance at the end of each month. Finally, multiply this figure by the total number of days in that period, which gives you your DSO. This shows you how long it takes for a company to receive payments from customers.